Much to be determined after suspension of Steamboat’s affordable housing ordinance
July 8, 2013
Steamboat Springs — In the short-term, the Steamboat Springs City Council’s proposed suspension of the city’s community housing rules will please many residential developers who no longer will have to pay tens or hundreds of thousands of dollars toward a community housing fund.
Developer Jon Peddie, who under the current ordinance was facing a $166,000 fee on his housing project off Hilltop Parkway, said the suspension will level the playing field.
“That’s all money that we can turn around and sell product slightly cheaper,” he said. “To not have that burden is absolutely going to give us a chance to be more competitive.”
In the long term, it will be up to the city, the council and the community to decide during the next year how affordable units should be financially supported here in the future.
Some want developers to continue to support the housing financially.
Others think it’s been an unfair burden.
So far, a new tax has been a commonly mentioned replacement to the seven-year-old affordable housing rules in the city that require developers to build a certain number of units or pay a fee.
The rules were drafted in 2006 at a time when several expensive housing developments were going up and the city wanted to ensure the developers were helping to satisfy the new housing demand they were creating.
But today, there is enough angst among developers who think the rules and fees associated with them are a burden that the City Council is moving forward to suspend them while city staff works on a revision or replacement.
"The reason this got brought up in the first place wasn’t anything to do with being for or against community housing," Peddie said. "It was just the whole fairness issue. If we really as a community feel we want to support community housing, it should be a grass-roots, community-based effort to figure out how to fund it and to fairly spread the cost."
Jason Peasley, the executive director of the Yampa Valley Housing Authority, said last week that while the proposed suspension wasn’t the preferred course of action for his organization, he would be pleased if council’s action led to the community embracing a new tax.
He said a tax would be a more reliable source of revenue than the current rules that have resulted in the payment of more fees to the community housing fund than the construction of affordable, deed-restricted units.
History, however, shows a tax won’t be easy to propose or pass.
The Housing Authority in 2011 had planned to go to voters seeking a property tax to generate $395,000 for their organization, but it abandoned the idea in part because board members didn’t think the community support was there.
With or without a new tax proposal, the city’s planning staff is continuing their efforts to re-examine the current affordable housing rules.
City planner Rebecca Bessey said the work starts this summer with a review of the local housing market.
"The goal of this is to take a look at what’s out there and what our needs are," she said. "It’s a lot of data collection."
The council last month told the city it could spend $5,000 on the study that council members said will help determine how much of a demand there is for affordable housing.
Planning Director Tyler Gibbs said it would help prepare for a larger examination of the community housing plan.
Meanwhile, Bessey said there are about nine development projects in the pipeline that potentially could be affected by the council’s proposed suspension, which cannot take effect until a second reading of an ordinance next month.
She said one project is unique in that the developers already have paid the entirety of their fee toward the community housing fund before all of the project was completed.
"It’s going to be up to the council to decide how they want the suspension to apply to these projects," she said.
Still an issue
Support for the current affordable housing rules has wavered as the economy slumped and new council members were sworn in.
In 2009, Meg Bentley was a member of the City Council that first was approached by developers who wanted to amend or do away with the rules.
They complained they were finding it hard or impossible to sell the affordable units they were creating.
Bentley didn’t support a suspension or repeal then, calling the move "reactionary" and saying a lack of affordable housing was hampering business development.
On Monday, she said the changing economy has warranted revisions to the rules, and she hopes the current council will commit to finding a better solution.
"I don’t think it’s good for the community for it to be just thrown out and to say, ‘Well, that didn’t work,'”she said, adding that she still thinks developers should contribute financially toward the creation of affordable units. "I still think it’s a huge issue."
She said she worries that a lack of affordable housing here continues to make it difficult for an entire segment of the population (snow plowers, carpenters, plumbers, electricians, etc.) to afford to live in the city.
The current council is likely to continue its discussions on affordable housing when it considers the first reading of the suspension of the current rules July 16.
To reach Scott Franz, call 970-871-4210 or email scottfranz@SteamboatToday.com